Employment law and worker exploitation: A case study of Springs Junction Cafe and Motor Inn
Worker exploitation is a serious issue that violates minimum employment standards and harms vulnerable workers. A recent example of this is the case of Springs Junction Cafe and Motor Inn, a West Coast business that was fined for the second time for breaching multiple employment standards during the 2020 pandemic. The business and its director, Jerry Hohneck, failed to pay an employee minimum wage and holiday pay, and told the employee to stop recording their hours. The employee was also not given a written agreement about a reduction of hours and was only paid the wage subsidy that the business received from the government.
Spring’s Junction Café and Motor Inn based in South Island, and its director, must pay $36,000 in penalties after breaching multiple minimum employment standards during the pandemic in 2020. The firm was penalised for similar offences in 2016.
- MBIE Published: 05 September 2023
The Employment Relations Authority (ERA) found this to be a deliberate act of exploitation and imposed penalties of $36,000, of which $10,800 was awarded to the employee. The business also had to pay $33,165 in wage arrears to the employee. This was not the first time that the business had been penalised for similar offences. In 2016, it was penalised for not paying another employee who was claimed to be a 'volunteer' working for accommodation and food. The employee, who was on a student visa at the time, was also in a vulnerable situation. The ERA said that such practices are inexcusable and never justify exploitation.
These cases illustrate the importance of enforcing and complying with the minimum employment standards in New Zealand, which are designed to protect workers from exploitation and ensure fair and decent working conditions. Employers who breach these standards not only face legal consequences but also damage their reputation and trust with their customers and employees.
It is important that employees are aware of their rights and that if employees are concerned that their employer is not meeting the minimum employment standards they report their concerns to the labour inspectorate in the first instance.
Buckettlaw encourages employers to keep up to date with the current minimum standards and ensure that they are providing their employees with the minimum entitlements.
If your employment rights have been breached or you need legal advice, do not hesitate to contact Buckettlaw, your employment law experts.